The nation’s three leading Credit Reporting Agencies (“CRAs”) – Equifax, Experian, and TransUnion – announced on March 9 a National Consumer Assistance Plan that will enhance their ability to collect consumer information that is as complete and accurate as possible and will provide consumers more transparency and a better experience interacting with CRAs about their credit reports.
The Plan was created as part of an agreement with New York Attorney General Eric Schneiderman, following cooperative discussions between the CRAs and the Attorney General’s office. Schneiderman noted that “all three credit reporting agencies worked cooperatively with the office to develop these critical reforms” and thanked the credit reporting agencies for working to help consumers.
The National Consumer Assistance Plan focuses on enhancements in two primary areas: consumer interaction with national credit reporting agencies, and data accuracy and quality. The highlights of the plan include:
- Consumer experience:
- Visitors to www.annualcreditreport.com, the website that allows consumers to obtain a free credit report once a year, will see expanded educational material.
- Consumers who obtain their free annual credit report and dispute information resulting in modification of the disputed item will be able to obtain another free annual report without waiting a year.
- Consumers who dispute items on their credit reports will receive additional information from the credit bureaus along with the results of their dispute, including a description of what they can do if they are not satisfied with the outcome of their dispute.
- Consumers who are victims of identity theft and fraud, and those whose information has been mixed with another person’s information, will have access to an enhanced dispute resolution process.
- Data accuracy and quality:
- Medical debts will not be reported until after a 180-day waiting period to allow insurance payments to be applied. The CRAs will also remove from credit reports previously reported medical collections that have been or are being paid by insurance.
- Consistent standards will be reinforced by the CRAs for submissions by data furnishers for inclusion in credit reports.
- Data furnishers will be prohibited from reporting authorized users without a date of birth, and the CRAs will reject data that does not comply with this requirement.
- The CRAs will eliminate the reporting of debts that did not arise from a contract or agreement by the consumer to pay, such as traffic tickets or fines.
- A multi-company working group will be formed to regularly review and help ensure consistency and uniformity in the data submitted by data furnishers for inclusion in consumers’ credit reports.
Most changes will be implemented nationally and will take effect over the next six to thirty-nine months.
Stuart Pratt, president and chief executive officer of the Consumer Data Industry Association, a trade group that represents the three CRAs, said that the involvement of the “state attorney general [gave] us the chance to have a dialogue with each other and work on details on how we can proactively pursue changes to our practices.” He added that the credit-reporting firms were not found to be in violation of any law.
Pratt went on to say that “[t]he current work done by the nationwide credit reporting agencies creates a market that is fair and focused on the needs of more than 200 million credit-active consumers in the United States,” and that “[t]he National Consumer Assistance Plan will make their credit reporting experience simpler and more transparent.”
A recent Wall Street Journal story says that the plan agreed to by the CRAs marks the biggest reform for the credit-reporting industry since 2003, when the Fair and Accurate Credit Transactions Act (FACTA) addressed how credit-reporting firms would treat disputes and required the CRAs to provide consumers access to free credit reports once every twelve months.
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